Recently I had a chance to read The Truth About Leads, a new cut-to-the-chase book written by Dan McDade. He's the CEO of PointClear, a company that does outsourced prospect development for B2B sales organizations. As you might imagine, he thinks, eats and breathes "leads."
Since it's such a hot topic today, I knew you'd want to learn more about his thoughts on lead generation. Enjoy my interview with him.
JILL: Why did you write the book “The Truth About Leads”?
DAN McDADE: It's because the word “lead” is so misunderstood and that misunderstanding is so costly. Most companies find other words or phrases to replace the word “lead”. Qualified sales opportunity, sales-ready opportunity, marketing qualified opportunity, suspect, prospect, opportunity, pipeline and scores of other words or phrases are used to replace the word “lead.”
Why? Because the very word has developed a negative connotation. Leads are the life blood of any organization; the lack of clarity about what a lead is, how it should be generated, by whom and how it should be worked and tracked is what causes most companies to suffer setbacks or failure.
Too, the process of defining, generating, working and tracking leads is a lot more complex than most people think because there are a lot of moving parts and there are a lot of interactions between people that are missed and/or misunderstood.
I had to write a book because I simply could not stand back and watch so much money being wasted. If you are tired of watching your company or companies’ waste money, the book tells you what to do about it.
JILL: In The Truth About Leads, you talk about the gap between sales and marketing. Hasn’t that gap shrunk in the last several years?
DAN McDADE: The short answer is no. Marketing has been rendered powerless in most companies.This function is often seen as one dimensional, responsible for trade shows, advertising, brochures, websites and in some cases, social media. Marketing is given a meager budget and a mandate to generate an impossible number of leads.
The sales force, on the other hand, is frequently filled with people who are misused or wrongly deployed. Companies don’t capitalize on their sales people’s strengths. Instead, hunters (also called closers) are expected to generate leads and farmers (relationship specialists such as account managers) are expected to close deals. People are being asked to do what they aren’t good at—and the result of those requests is inefficiency and ineffectiveness. The responsibility for leveraging the strengths of the team starts at the top.
Finally, I believe that it is impossible to fix the sales side of the problem without first addressing the marketing deficiencies.
JILL: So what should companies do first?
DAN McDADE: I call it the Five-step Program to Close the Marketing Gap
1. Stop the carousel on marketing programs.
Take a look at all of your planned programs—advertising, trade show promotions, direct marketing, webinars—and stop or cut back the ones you can while you take the time to evaluate their effectiveness. Don’t keep the merry-go-round going just because they’re already started.
2. Plan to crawl, walk and run.
You will not be able to roll out tested marketing programs next month. No company can effectively impact current quarter results with current quarter marketing. Don’t try. Instead, plan carefully and execute thoughtfully for long-term sales success.
3. Pinpoint your market.
For example, one client used a market research firm that determined that the prospect universe exceeded 80,000 companies. That's too much. After analyzing their business, we focused on the best 22,000 opportunities and we'll continue to work the universe down based on the appropriateness of the fit and the potential margin to our client.
4. Test your market, media and offer before investing.
Before spending significant dollars on a marketing program, it is imperative that you test your list or database (market), the communication platforms you plan to use (media), and your price, package, terms, guarantee, differentiators, etc. (offer). Simple as this seems, it almost never happens. This simple, practical testing step can hugely impact sales and save tens of thousands of dollars.
5. Measure your results. If you do not have a process to track and measure the ROI of your marketing programs you are just throwing darts. Only by quantifying the success of each program can you know if your efforts are worthwhile. In fact, you may be surprised to find that anecdotal evidence does not align with the facts.
JILL: One of the chapters in your book is called “The Truth About Sales”. Can you summarize that chapter for our readers?
DAN McDADE: First, there are some basic misunderstandings about managing a sales force:
1. Hunters, farmers and beaters.
Do you know what type of salespeople you’re hiring? Are you expecting hunters to beat? When you look at your sales force do you find 80 percent farmers and 20 percent hunters? If so, you’re not alone.
2. Sales methodology.
Most of the salespeople you hire to hunt today really do not know how. Regardless of which sales methodology you use, the key is to integrate it with reporting systems and to follow through and follow up. Event training simply does not work. A sales methodology has to become a way of life.
3. Sales motivation.
Do you want to know why there is never any movement in the forecast? Why is it that there does not appear to be any progress until an account is either won or lost? The first and main reason is that salespeople do what you pay them to do, not what you want them to do. Sales executives are driven by control, credit and compensation. All three of these elements are strong motivators that can quickly turn into de-motivators.
Sales reps want credit for everything. They will deserve credit if you can motivate them to comply with a true closed loop system that tracks prospects through the buying cycle (I suggest rewarding reps that do this). Sales executives will often hide the steps in the sales process between lead acceptance and close. They fear accountability and being blamed for a loss, so they provide little visibility (except for wins) unless they are forced to do so.
Managers who understand and manage on the basis of both the art and science of sales can greatly impact the outcome of sales opportunities.
JILL: Any last recommendations?
DAN McDADE: These are what I call the Final Words of the book:
Executive and C-level management owns responsibility for providing high level market, message and media strategic direction. If you are a C-level executive today, and have given your team the direction that “our market is the Fortune 500” or “we sell enterprise solutions” (as examples), then you may be partially responsible for gaps between expectations and actual results.
Tight, vertical and geographically defined markets are always necessary. Always. If you do not have a handle on this, from a deployment and message perspective, you are wasting time and dollars. The strategic-level messaging most companies use does not work.
If you cannot explain what you do with a simple story and/or analogy, you need to work harder on carefully crafting just what you need to say. Close to 95 percent of most marketing investment is wasted due to marketing’s focus on short-term leads and failure to value and capture the long-term leads.
Also, frequently lost is information about companies that are qualified, but have no immediate opportunity—valuable information that results from the process of finding short-term leads. Gathering market intelligence and applying the learning’s in the context of a thoughtfully planned nurturing program delivers significant return.
If you have an inside sales group, it is likely that they are either glorified administrators, or making 35 or fewer dials per day due to other pressing issues. That means that for every person you have in inside sales, every day you are settling for 65 percent less productivity than you should.
You can’t afford anything less than a dedicated group of trained professionals focused 100 percent on sales. An advocate is someone who will, without prompting, speak well of you and your company—and in essence, help you sell. Initiatives to keep customers happy can help you make money. Since buyer’s remorse starts the moment the deal is signed, the activities, events and programs designed to create advocacy need to start then too.
Dan McDade, author of The Truth About Leads, founded PointClear in 1997 with the mission to be the first and best company providing outsourced prospect development services to companies with a complex sales process.